Handbag retailer Mulberry’s pre-tax profits crashed 46% to £14m in its full year and like-for-likes nosedived 15% in recent weeks.
In the 10 weeks to June 7, total sales dropped 9% as its turnaround begins in earnest following a turbulent year in which its chief executive quit following a series of profit warnings. Mulberry also warned that a double-digit decline in wholesale revenue is expected for the year.
The luxury retailer said that the profits plunge in its year to March 31 reflected the increase in costs associated with new stores opened over the past two years as well as £3.4m of exceptional costs.
Retail like-for-likes dipped 3% over the year although retail sales rose 2% to £109m. Total sales dipped 1% to £163.5m as wholesale revenue fell 6%.
Mulberry chief executive Bruno Guillon left in March after his controversial strategy of hiking prices in order to appeal to more well-heeled shoppers failed.
Mulberry executive chairman Godfrey Davis said: “We are taking steps to restore the business to growth by creating desirable new product across the entire Mulberry range whilst continuing to invest for the longer term.
“We have listened to our customers and are introducing attractive new products in the key £500 to £800 price range. As a first step we introduced the new Tessie collection two weeks ago which is proving popular.
“While the business faces a challenging year, I am confident that we can build on Mulberry’s solid foundations and unique brand positioning in the luxury market to restore growth in the medium term.”